Woodside will exit its 50% non-operated participating interest in the proposed Kitimat LNG (KLNG) development in British Columbia, Canada to focus on the successful delivery of ‘higher value opportunities’ in Australia and Senegal.
Woodside said the exit, which follows Chevron’s decision to halt further funding of the project earlier this year, will include the divestment or wind-up and restoration of assets, leases and agreements covering the 480 km Pacific Trail Pipeline route and the site for the proposed LNG facility at Bish Cove.
According to the company, the costs associated with the decision to exit KLNG are expected to amount to between US$40 – 60 million.
Acting CEO Meg O’Neill said Woodside will work with Kitimat Joint Venture participant and operator Chevron Canada to protect value during the exit.
“Following Chevron’s decision to exit KLNG and subsequent decision in March 2021 to cease funding further feasibility work, Woodside undertook a comprehensive review of our options for the project and our wider development portfolio,” Ms O’Neill said.
“The Kitimat LNG proposal was designed to develop a new source of LNG to supply Asian markets in the latter part of this decade. However, we have decided to prioritise the allocation of capital to opportunities that will deliver nearer-term shareholder value.
“Woodside is focused on working towards the targeted final investment decision for the Scarborough LNG development in Western Australia in the second half of 2021 and the continued successful execution of our Sangomar oil project offshore Senegal.”
She said Woodside will retain a position in the Liard Basin upstream gas resource.
“Retaining an upstream position in the prolific Liard Basin provides Woodside a low-cost option to investigate potential future natural gas, ammonia and hydrogen opportunities in British Columbia,” Ms O’Neill concluded.
